J C Irvine Haulage Pty Ltd (in Liquidation) (Respondent) v John Carr Irvine

[1993] SASC 4122

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA OLSSON J

CWDS
Practice - South Australia - practice after Supreme Court Act 1878 - caseflow management - appeal from interlocutory order renewing summons - summons not served on appellants within time - whether respondent demonstrated existence of 'good cause' for renewal - renewal for limited period only - wide discretion whether to renew - appellant unable to demonstrate error in exercise of discretion.
Supreme Court Rules SCR 10.01, 10.03, 10.06 and Corporations Lawss232(4), 597. Cook v Dodds (1985) 40 SASR 79; Leslie and Ors v F S Evans and Son Pty Ltd and District Council of Stirling (1988) 141 LSJS 358; Victa Limited v Johnson (1975) 10 SASR 496; Williams and Anor v F S Evans and Sons and Anor
(1988) 52 SASR 237; Kleinwort Benson Ltd v Barbrak Ltd (1987) 1 AC 597; Ramsay v Madgwicks (1989) VR 1; Adam P. Brown Male Fashions Pty Ltd v Phillip Morris Inc and Anor (1981) 148 CLR 170; Consolidated Gold Mining Areas NL and Ors v Enterprise Gold Mines NL and Anor (1992) 165 LSJS 33; John Robertson and Co Ltd (In Liquidation) v Ferguson Transformers Pty Ltd (1973) 129 CLR 65; Mart v Bradley (1916) SAIR 129; Carslake v Guardian Assurance Company (1977) 15 SASR
378; Thomson v Lord Clanmorris (1900) 1 Ch 718 and Hamilton v Kaljo (1989) 17 NSWLR 381, considered.

HRNG ADELAIDE, 17 August 1993 #DATE 25:8:1993
Counsel for appellants:     Mr A Besanko
Solicitors for appellants:    Thomsons
Counsel for respondent:     Mr H Rowell
Solicitors for respondent:    Stratford and Co

ORDER
Appeal dismissed.

JUDGE1 OLSSON J This is an appeal from an interlocutory order made by a Master on 17 March 1993. By that order he renewed the respondent's summons in this action, pursuant to SCR 10.03, by extending the time for service of it until 15 May 1993. 2. The summons was issued on 13 November 1992. The respondent sought damages from the appellants, alleging that, in their capacity as directors of the corporate entity, they had failed to exercise a reasonable degree of care and diligence in the exercise of their powers and the discharge of their duties, contrary to the provisions of section 232(4) of the Corporations Law. It is agreed that this was an incorrect reference and will, if this action proceeds, need to be amended to constitute a reference to section 124 of the Companies Act, 1962. 3. On 15 February 1993, no evidence of service of the summons being on file, the Registrar caused a notice to be issued to the solicitors for the respondent (in accordance with normal caseflow management procedures) informing them that, in accordance with the provisions of SCR 10, the action would be placed in the List of Inactive Cases if steps were not taken for its renewal within one month of the date of the notice. The necessary consequence of such a step was that, if the action was so placed in that list and not then removed from it within two months thereafter in accordance with SCR 10.06(4), the action would, automatically, stand summarily dismissed. By ex parte application dated 4 March 1993, the respondent sought a renewal of the summons for a further three months. That application was supported by an affidavit which disclosed that, in a separate action in this court, the liquidator of the respondent had sought an examination of the appellants before the court pursuant to section 597 of the Corporations Law, which examination was to commence on Tuesday 23 February 1993, but was, apparently, not then completed. 4. It was represented to a Master in the affidavit that it was not advisable to serve the summons until the examination had been completed. 5. On 17 March 1993 the Master renewed the summons to 15 May 1993. 6. Evidence was subsequently placed on file to indicate that at least one of the appellants was duly served on 16 April 1993. 7. By application dated 21 May 1993, filed by solicitors acting on behalf of the appellants, an order was sought that all but the first named defendant (who was said to have died) be at liberty not to file an appearance and defence for a period of 28 days, or until an appeal by the remaining appellants against the order for renewal of the writ had been determined, whichever was the later. 8. The application for leave not to file an appearance or defence at this stage was made because, it was perceived, such action might constitute a bar to any challenge to the renewal of the summons. In a supporting affidavit, the solicitor for the appellants deposed that no attempt was made to serve the summons on those appellants until after the section 597 examinations, despite the fact that all had attended those examinations and could readily have been served. Moreover, it was averred that, despite requests on and after 15 April 1993 that the application to renew the summons and its supporting affidavit be supplied to the solicitors for the appellants, these were not immediately forthcoming. 9. The appellants' application came before the Master on 21 and 26 May 1993. On the latter date he, in effect, extended the time for appearance and defence for a period of seven days after determination of the proposed appeal against the order of renewal. 10. On 25 May 1993 the appellants filed an application for an extension of time within which to appeal and a proposed notice of appeal. At the hearing of the appeal the application to extend time was granted without objection. 11. The grounds expressed in that notice are that no efforts had been made to serve any of the appellants prior to the summons becoming stale and that the affidavit in support of the application for renewal had not disclosed any good cause for the renewal. 12. An initial point taken on the appeal was that it was misconceived procedurally and that the appellants ought to have applied to set aside the order complained of in manner adverted to in Lunn, Civil Procedure South Australia Note 10.03.50. In many instances that is the appropriate procedure, particularly if a defendant desires to place before the Court for its consideration facts and circumstances which were not adverted to when the original ex parte order was made. However, there is authority for the proposition that an ex parte order can only be set aside as a consequence of a formal appeal where the aggrieved party does not seek to adduce additional, material evidence and merely seeks to argue, on the basis of that which was before the court on the ex parte application, that the order made was ill conceived and ought to be set aside. (As to this see the discussion of the relevant decided cases in Cook v Dodds (1985) 40 SASR 79.) 13. In my view there is, with respect, substance in the concept accepted by Lunn AJ in Cook v Dodds and I accept it. 14. It follows that, in the instant case, as the appellants do not seek to do other than impugn the order appealed against upon the basis of the material which was before the Master, there can be no valid criticism of the procedure which has been adopted. 15. The next point which arises is as to whether, in the relevant sense, it can be said that, on the ex parte application, the respondent demonstrated the existence of "good cause" for the renewal sought, as required by SCR 10.03(3). 16. Much debate took place concerning the decided authorities on that topic. However, before I turn to the effect of them, there is one important preliminary point which must be made. 17. In general, those authorities bear upon the provisions of rules of court in the form which preceded the present SCR 10 and the other allied rules related to the current scheme of caseflow management, as administered in this court. Those former rules erected a scheme whereby an initiating process remained current for 12 months after issue and then became stale if not served or renewed. An underlying concept was that it was both inappropriate and potentially unfair to a defendant that proceedings should be permitted to be initiated and then remain dormant for a long period of time without the defendant's knowledge - the more so if this might well have the practical effect of extending - in a de facto sense - a limitation period which a potential defendant could assume had expired. 18. The present SCR 10 erects a very different procedural environment. It is part and parcel of the caseflow management package which is designed to ensure that, once initiated, actions in this court proceed to a conclusion efficiently and with reasonable dispatch. 19. So it is that SCR 10.01 confers an originating processes an initial life of three months, with the proviso that, within 4 months of issue, application may be made for a renewal for a period not exceeding three months (SCR
10.03(3)). If a summons has not been served or renewed within 4 months of issue then it is automatically transferred to the Inactive List (by virtue of SCR 10.06), from which it stands dismissed for want of prosecution two months later unless, in pursuance of SCR 10.06(4), its removal is ordered by the court. If such removal is so ordered, then the summons would, on such removal, normally be renewed for a specific period. 20. It is at once to be seen that the "renewal" contemplated by SCR 10 is of a different type to that envisaged under the old rules. The renewal is for a brief period only and for the purposes and as part of the overall scheme of caseflow management. It is a means by which the Court controls and manages its own process to ensure proper resort to that process, and the orderly management of it and of the resources of the court. 21. Whilst, no doubt, some of the considerations applicable to the old rule still remain pertinent (particularly insofar as they bear on aspects such as potentially reviving statute barred claims) the published authorities arising from and in relation to it must be scrutinised with great care, because the underlying policy considerations which gave birth to that rule are quite different from those which spawned SCR 10 in its present form. 22. In the instant case the application to the Master was made in manner and for the specific purposes contemplated by the caseflow management procedures. Insofar as more general principles are applicable it seems to me that what I said, as a matter of broad approach, in Leslie and Ors v F S Evans and Son Pty Ltd and District Council of Stirling (1988) 141 LSJS 358 (albeit apropos the expression "proper cause shown") is no less applicable to SCR 10.03(3). I there made the points:-
    "It seems to me that the employment of that phrase was
    intended to debunk any final vestige of a suggestion that the
    applicant must show exceptional reasons and to reconfirm that the
    Court was to have and to exercise a judicial discretion unfettered
    by any rigid rules. The expression 'proper cause shown' implies,
    to my mind, that the court is to examine all of the relevant
    circumstances and ultimately decide each matter upon merit on a
    balancing of justice as between the parties. It is to be a
    slightly more liberal approach than that enunciated in the old
    Order 8 Rule 1(2), but nevertheless requires an examination of the
    factors identified by Bray CJ in Victa Limited v Johnson. It is
    designed to ensure that, in truth, 'the relation of rules of
    practice to the work of justice is intended to be that of handmaid
    rather than mistress' and that what is at issue at the end of the
    day is to determine each case as justice may require. (cf dicta
in Jess v Scott and Others (1986) 70 ALR 185). A plaintiff
    bears the onus of demonstrating that the balance of justice tips
in his favour, having regard to all relevant aspects." 23. As Bray CJ stressed in Victa Limited v Johnson (1975) 10 SASR 496 a very important area of consideration is what prejudice (if any) to a defendant, additional to that which may have existed when the proceedings were initiated, will result to that party if a contemplated renewal is granted. But, in the end, as was re-stressed in Williams and Anor v F S Evans and Sons and Anor
(1988) 52 SASR 237, a balancing exercise is necessarily involved. In Kleinwort Benson Ltd v Barbrak Ltd (1987) 1 AC 597 at 622, Lord Brandon made the point that it is not possible to define or circumscribe expressions such as "good cause". All depends on the particular circumstances of the case and the issue must essentially be left to the discretion of the judicial officer deciding the matter. 24. No serious prejudice of the nature above mentioned was demonstrated in the present case. As mandated by the caseflow management principles, the delay was short and, whilst some authorities suggest that awaiting the outcome of other proceedings is no warrant for delay in service (Ramsay v Madgwicks
(1989) VR 1, Kleinwort Benson Ltd v Barbrak Ltd (supra), the reason for the delay is at least explicable. The situation was not the product of mere inexcusable dilatoriness. 25. It must be remembered that the circumstances of the case at bar do not readily fit any of the categories adverted to by Lord Brandon in Kleinwort Benson Ltd v Barbrak Ltd (see report pages 615-6). The important feature of this case is that the appellants contend that, in any event, the claim became statute barred prior to the institution of the proceedings, whereas the respondent argues that the claim is not statute barred even now. A renewal of the summons did not and could not alter those stances or the capacity of the parties to argue them, one iota. No perceivable prejudice therefore resulted to the appellants, who remain free to pursue their contention in the same manner as would have been possible had the summons been served within the time contemplated by SCR 10.03(1). 26. At the end of the day I am really being invited to intermeddle with what was the exercise by the Master of a wide discretion as to a procedural matter, when no facts and circumstances are relied upon beyond those with which he was confronted. As was pointed out in Adam P. Brown Male Fashions Pty Ltd v Phillip Morris Inc and Anor (1981) 148 CLR 170 at 176-7 and reiterated in Consolidated Gold Mining Areas NL and Ors v Enterprise Gold Mines NL and Anor
(1992) 165 LSJS 33, an appellate court will be most reluctant to interfere with a decision of this type (the more so - I interpolate - where it arises from a caseflow management context) unless it appears that the Master acted on a wrong principle, or allowed extraneous or irrelevant matters to guide or affect him, has mistaken the facts or has failed to take into account some material consideration. 27. In my view the appellants have fallen far short of satisfying that test. On the contrary, if the contention in law of the respondent is correct, then a refusal to renew would occasion grave injustice to it. On the other hand, if the contention of the appellants is upheld, it will not be subjected to any prejudice at all. 28. Although strongly invited by counsel to rule upon the apparent conflicts in dicta to be found in John Robertson and Co Ltd (In Liquidation) v Ferguson Transformers Pty Ltd (1973) 129 CLR 65, Mart v Bradley (1916) SALR 129, Carslake v Guardian Assurance Company (1977) 15 SASR 378 at 391 and Thomson v Lord Clanmorris (1900) 1 Ch 718, by way of contrast with Hamilton v Kaljo
(1989) 17 NSWLR 381, as to the proper interpretation of section 37 of the Limitations of Actions Act and its potential application to this case, I propose firmly to resist the temptation to do so. In view of my conclusions above expressed, it is unnecessary to rule upon that question. Such an issue is best addressed at a more appropriate stage of these proceedings, when it directly arises. 29. I consider that the appellants have not demonstrated the existence of any proper ground for overturning the order appealed against. The appeal must be dismissed.